India to announce a new bio fuel policy to cut imports of fossil fuels

The top three state-run oil companies pledged $2 billion investment for carrying out R&D on biofuels.

The Dollar Business Bureau 

The Government plans to unveil a new policy for promoting the use of biofuels in the transport that will help in catalyzing about Rs.1 lakh crore of investment in the whole value chain, Oil and Petroleum Minister Dharmendra Pradhan said on Thursday. 

India has to import around 80% of crude oil to meet its requirements and use of biofuels produced from non-edible oils help the country in meeting its target of cutting down the imports by 10% by 2022, Pradhan said at an event organised to mark ‘World Biofuel Day’. 

The top three state-run oil companies of India Bharat Petroleum Corp Ltd (BPCL), Indian Oil Corp (IOC) and Hindustan Petroleum Corp Ltd (HPCL) have pledged $2 billion investment for carrying out research and development (R&D) on biofuel technologies, he said. 

“We will soon take to the Cabinet a biofuel policy that will provide for investment climate, incentives, government role and commercial returns for developers,” the Minister said. 

This policy will help in developing “a biofuel economy worth Rs.1 lakh crore in the coming two years,” Pradhan said, while adding that the government has already asked the state-owned oil firms for establishing ethanol plants at twelve locations in the coming year. 

“Promoting biofuels helps in creating jobs, supports farmers, fosters economic growth, and also helps in improving energy security,” he said. 

India also plans to cut its carbon footprint by increasing the use of natural gas in the energy mix to 15% in the next 3-4 years, up from the present 6.5%. 

Energy consumption in the country is likely to increase as the government is targeting for 8-9% economic growth in the current fiscal year.